Nonprofits continue to face tighter regulations and shifts in donor giving, particularly with the permanent extension of 2017 Tax Cuts and Jobs Act (TCJA) provisions following the passage of P.L. 119-21, or Republicans’ “One Big Beautiful Bill Act.” Meanwhile, giving patterns continue to evolve, and competition for donor attention remains high.
With tax changes and softening donation rates, finance leaders and fundraising teams need tighter coordination on reporting and stewardship. Fundraising performance depends on the quality, speed and consistency of financial information, so when finance and fundraising teams are not aligned, organizations often see delayed reporting, inconsistent data, unclear gift treatment, and avoidable rework. Over time, those issues reduce efficiency and can weaken donor confidence.
The Collaboration Gap Between Finance and Fundraising
Finance and fundraising need each other to operate effectively, but in many nonprofits, the relationship is fragmented and transactional. Development needs timely answers on gift status, restrictions, pledge receivables and campaign performance. In turn, finance requires complete documentation, consistent coding and a reliable audit trail. When those needs are not met, teams can default to workarounds that create friction and slow down decision-making.
Several factors commonly drive the collaboration gap, including:
- Different Success Measures Among Teams: Fundraising is often measured by dollars raised, pipeline progress and donor engagement. Finance is measured by accuracy, compliance, close timelines, internal controls and the quality of reporting.
- Unclear Roles and Ownership: This is especially impactful around restricted gifts, grant compliance, event revenue and sponsorships, in-kind contributions, and the timing of revenue recognition.
- Tools That Don’t Support Collaboration: When donor systems, spreadsheets and the general ledger (GL) are not aligned, the organization spends more time reconciling than analyzing.
Friction between these two teams is not uncommon, but if left unchecked, it can lead to further organizational division and confusion.
The Impact of the Collaboration Gap
This collaboration gap results in more than inconvenience; it affects the reliability of contribution reporting and slows decisions about campaigns, budgets and available funds. Finance teams spend time managing exceptions instead of improving processes, while fundraising teams lose time waiting for answers or rebuilding reports. Leadership can end up with competing numbers and less confidence in the story behind them.
Issues show up most often in areas like:
- Restricted gifts
- Grant reporting
- Endowment reporting
- Event revenue
- In-kind gifts
- Customer relationship management (CRM)-to-GL mapping
When finance and fundraising are not aligned, the impact shows quickly in the close process, reporting, and how confidently leadership can act on fundraising results. What begins as small process mismatches often grow into recurring exceptions that are hard to control and time-consuming to unwind.
For finance, the consequences are usually practical and measurable, such as longer close cycles due to late or incomplete documentation or manual reconciliation between the CRM and the GL.
Reporting risk increases when restricted gifts, campaign totals, grants and in-kind contributions cannot be supported consistently with audit-ready detail. Cash flow visibility can also suffer when pledge tracking and collections responsibilities are split or unclear. Over time, staff time shifts from analysis and forecasting to resolving exceptions and rebuilding reports.
These issues do not stay confined to the back office. As turnaround time slows and answers vary by report or requester, donor stewardship and leadership decision-making both suffer. The organization can lose momentum during campaigns and create avoidable audit and reporting challenges. Closing this gap starts with clear definitions, clear ownership, and a routine for resolving exceptions before they reach leadership or donors.
Real-world Example
A foundation supporting a statewide public school saw recurring friction between development and finance because gifts were tracked in different systems and the teams used different definitions for restrictions and reporting cutoffs. Development needed quick clarity on gift intent, campaign progress, and pledge status, while finance needed consistent documentation and coding to support accurate close and audit-ready contribution reporting.
As gift volume grew, routine questions required manual reconciliation, and leadership occasionally received conflicting views of available funds and campaign totals. The foundation addressed this by:
- Tightening gift intake documentation
- Standardizing coding rules for restrictions
- Clarifying who owned each handoff from gift entry through financial reporting
With fewer exceptions and more consistent reporting, finance reduced rework during the close, and development had faster access to numbers that leadership could rely on for updates and stewardship.
How To Align Finance and Fundraising
Aligning finance and fundraising reduces rework and improves the reliability of contribution reporting. For finance leaders, alignment means agreeing on definitions, documentation standards, and who owns each handoff from gift entry through financial statements and stewardship reporting.
Bridging the collaboration gap starts with improved communication and may include a variety of efforts, from regular meetings to integrating new technology solutions.
Develop Trust Between Teams
Trust improves when finance and fundraising use the same definitions and follow the same handoffs. Start by agreeing on a small set of shared measures, such as timeliness of gift coding, accuracy of restrictions and the time it takes to answer routine reporting questions.
Establishing regular meetings between fundraising and finance is another essential step to developing trust and provides the opportunity to review exceptions, large or unusual gifts, pledge activity, and items that will affect the close.
Additionally, thoroughly documenting basic policies and procedures will help identify ownership over tasks and workflow gaps. This may include documenting required backup, who approves coding for restricted gifts, and how disagreements are escalated.
Implement New Technology
Even when finance and fundraising are aligned on roles and definitions, disconnected systems can keep the organization stuck in manual work. When donor data, gift documentation, and the general ledger do not align cleanly, teams spend time reconciling instead of reviewing results. A practical modernization goal is a shared, reliable data source that supports day-to-day stewardship questions and month-end reporting.
Data integration remains a common obstacle for many organizations. Cherry Bekaert’s CFO Survey found that 55% of respondents dealt with data consistency issues, and 48% reported a lack of integration between financial systems as a top challenge. In the nonprofit sector, research from Nonprofit PRO found that 61% of nonprofits still rely on manual spreadsheets and only 21% have taken steps to modernize.
For finance leaders, new technology does not have to mean a full platform replacement on day one. Start by identifying where reconciliation and rework occur most often, then prioritize solutions that improve data flow between the CRM, subledgers and the GL. That can include standardizing chart-of-accounts and fund mapping, automating recurring imports or integrations, and strengthening controls around gift coding and documentation.
Over time, enterprise resource planning (ERP) and workflow automation can support faster closes, clearer reporting on restrictions and pledges, and more consistent numbers that fundraising can use for leadership updates and donor communication.
Real-world Example
An animal welfare nonprofit outgrew entry-level accounting tools as fundraising activity increased and reporting expectations became more complex. Donor and gift information lived in one system while financial reporting lived in another, so finance and development relied on spreadsheets and manual reconciliations to answer routine questions.
The organization modernized by adopting a more scalable finance platform and improving the data flow between fundraising records and the general ledger. Finance standardized coding and documentation requirements around restricted gifts, pledges and campaign activity could be reported consistently.
With fewer manual workarounds, the team improved the timeliness of close and increased confidence in contribution reporting, giving leadership and development a more reliable view of results.
The Results: Improved Fundraising Strategies and Operations
When finance and fundraising teams align, the payoff is visible in day-to-day operations and in leaderships’ confidence in the numbers behind fundraising performance. Finance can close faster with fewer exceptions, provide more consistent reporting on restrictions and pledges, and respond to routine stewardship questions without rebuilding reports. Fundraising benefits from clearer visibility into gift intent and campaign progress, and donors benefit from more timely and consistent communication.
In practice, the results often include fewer manual reconciliations between the CRM and the GL, clearer ownership for gift coding and documentation, and a predictable cadence for resolving exceptions before they affect the close.
For finance leaders, these outcomes support stronger governance and lower reporting risk without slowing down fundraising operations. The main requirement is a reporting process that both teams will follow, backed by clear definitions and documentation. With that foundation in place, organizations can spend less time resolving exceptions and more time using financial information to guide fundraising decisions and explain results to stakeholders.
Your Guide Forward
If your nonprofit needs help bridging the gap between finance and fundraising teams, Cherry Bekaert can support the work from assessment through implementation. Our Not-for-Profit and CFO Advisory teams assist with:
- Assessing current state operations
- Facilitating alignment workshops
- Bridging policy gaps
- Integrating systems and reporting
- Training for collaboration
- Outlining procedures and systems that get real-world results
- Providing ongoing support
Our teams work with nonprofit finance and development leaders on modernization efforts that improve reporting, close processes and cross-team coordination. Connect with an advisor to discuss your current state and the next steps to support finance modernization and collaboration.
